Why Dominant Companies Are Vulnerable

Overview: Recent research suggests that, as consumers feel that their choices are restricted, many respond by turning away from the market leader. It is widely assumed that in many technology markets, dominant players have a powerful advantage and often are able to leverage that edge over time. But this is not necessarily true. Over the past decade, popular social networking sites including Friendster, MySpace and Bebo initially picked up a large number of users only to lose ground to new competitors and fade into the background. Facebook, by contrast, has succeeded at dramatically expanding its position in the global market, even as it has worked to manage an increasing number of dissatisfied users. Similar patterns of emergence, growth and dominance, followed by consumer disenchantment or ambivalence and a loss of brand equity have affected well-known technology companies such as Microsoft and AOL. Why do companies move from market strength to vulnerability?

Biography: Kyle B. Murray is associate professor of Marketing at the University of Alberta, Canada. His research examines consumer judgment and decision making, with a focus on the construction of preference and value. His work has been published in the Journal of Consumer Research, Journal of Consumer Psychology, Journal of Marketing Research, MIS Quarterly, MIT Sloan Management Review and Organizational Behavior and Human Decision Processes. He has consulted for the Canadian Automobile Dealers Association, Canadian Petroleum Institute, Competition Bureau of Canada, General Motors, Greater Edmonton Foundation, Industry Canada, Johnson and Johnson, Microsoft and Wolseley. Prof. Murray was recently recognised as the University of Alberta's Petro-Canada Young Innovator and as one of Edmonton's Top 40 under 40.